Question: 1. If a projects NPV is greater than zero, then the a. project destroys firm value. b. project does not increase shareholder wealth. c. investment

1. If a projects NPV is greater than zero, then the

a. project destroys firm value.

b. project does not increase shareholder wealth.

c. investment is also greater than the present value of cash flows.

d. project adds value to the firm.

2. What is the net present value of a project that requires a net investment of $76,000 and produces net cash flows of $22,000 per year for 7 years? Assume the cost of capital is 16 percent.

a. -13,000

b. 12,848

c. -88,852

d. 78,000

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

TASK : In the role of an instant messaging administrator, provide the deployment plan for MS teams in a higher education institution. The deployment plan should include step - by - step...

If a project's NPV is greater than zero, then the A - project adds value to the firm B - project destroys firm value C - investment is also greater than the present value of cash flows D - project...

TRUE OR FALSE QUESTIONS A. Stocks that don't pay dividends have value based on the expectation that dividends will eventually will be paid. B. Companies that anticipate high growth in their early...

Introduction In Motion, Inc. (INT) is a profitable, debt-free designer and marketer of electric unicycles, scooters and mini-bikes, headquartered in San Diego In the face of extraordinary inflation...

10 1 pts Zero Motorcycles is a steady-state firm, with unchanging Balance Sheets and Income Statements. Here is information for its most recently reported year: Balance Sheet Total Assets Debt $900...

Valuing In Motion to all stakeholders: Bay Masage Sell Continued A competing team agrees with your malysis and computations, except they believe dut The appropriate twace for the project is The al...

12. Which of the following statements about NPV is correct? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows A. If a project's NPV is...

all of it pls True False 14. When bankruptcy costs are considered, there is an optimal capital structure for a firm that can be determined by a well-known formula developed by Modigliani and Miller...

A firm has $30 million in outstanding bonds (debt) with a coupon rate of 7% and a yield-to-maturity of 6%. The firm has 1 million shares of outstanding common stock with a current market price $30...

1. A profitability index (PI) of .92 for a project means that __________. a the project's costs (cash outlay) are (is) less than the present value of the project's benefits b the project's NPV is...

What are the primary differences between a permanent fund (governmental) and a private-purpose trust fund (fiduciary)?

An electron is accelerated from rest through a potential difference of 2.50 MV. Find the electrons (a) Speed, (b) Kinetic energy, and (c) Momentum.

. 1 6 0 . Julia is an entrepreneur. She has accumulated savings in a personal account bypurchasing a balanced segregated fund. Now that part of this fund is about to reach maturity,Julia would like...

Questions 5 & 8 please 1 Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing...